Express Scripts to Offer Cheaper Drugs for Uninsured Customers

A Walgreens pharmacy in Wheeling, Ill. A new plan from Express Scripts could provide less expensive drugs for uninsured and underinsured customers.

Scott Olson / Getty Images

By KATIE THOMAS

May 8, 2017

It is one of the most acute indignities of being uninsured in this country: Those with the least ability to pay are asked to spend the most for their prescription drugs.

That’s because people without health insurance are forced to pay the list price for brand-name drugs, while insurers have access to a lower, negotiated rate for the same products.

On Monday, one of the biggest pharmacy benefit managers in the drug world, Express Scripts, said it would begin offering a lower rate for a select group of frequently used drugs to people without health insurance, or to those who are stuck in plans with such high deductibles they couldn’t otherwise afford their medications.

The move by Express Scripts, which has been widely criticized as one of the major drivers of rising drug costs, is particularly well timed. It comes just days after Republicans passed a health care bill that some estimate could leave millions of Americans without health insurance, and when there is considerable uncertainty among various layers of the nation’s health care industries.

Prices of medicines available from InsideRx, a subsidiary of Express Scripts.

Inside Rx

Timothy C. Wentworth, the chief executive of Express Scripts, said about 30 million Americans either have no insurance or high deductible plans. He said the program was not initiated with the changes to the health care law in mind, but rather to help people who are in need. “We launched this with an idea that we can get those 30 million people similar discounts to what good-sized payers get, and provide them relief," he said in an interview.

The program, InsideRx, is a subsidiary of Express Scripts and will work when consumers sign up for the service, which is free, and present a discount card or a mobile app to pharmacies around the country — including major chains like CVS and Walgreens, and at Kroger supermarkets — to get discounts that average around one-third off the list price. Commonly prescribed drugs, including the cholesterol treatment Crestor and some brands of insulin, are included on the list about 40 products. The program will allow Express Scripts to expand its customer base. A company spokesman said it would take a “small fee” from pharmacies for every transaction.

It is being started in partnership with GoodRx, a technology company that has been offering similar discounts on mostly generic drugs through deals it previously struck with competitors to Express Scripts.

The new program was greeted with skepticism by Ben Wakana, executive director of Patients for Affordable Drugs, a nonprofit that does not accept funding from organizations that profit from the development or distribution of prescription drugs.

“Drug prices are so high that even with a discount, medication will unfortunately be out of reach for many uninsured or underinsured Americans,” Mr. Wakana said, questioning the motives of pharmacy benefit managers such as Express Scripts, which are known as P.B.M.s. “We continue to believe the most effective way to make drugs more affordable is to bring down drug prices, not to give P.B.M.s more leverage and hope for the best.”

InsideRx members would present a card, similar to this one, in order to obtain discounts on medications.

Insider Rx

Adam J. Fein, a drug-distribution expert with Pembroke Consulting, noted that some of the drugs on the list, like Nexium, have similar versions that are available as prescription generics or over-the-counter drugs. Still, he said, the program “is a positive development because the system is set up to soak the poor, and this is a way to pass some of the rebates down to the point of sale.”

But the plan comes with important caveats. Patients who are covered by government programs such as Medicare and Medicaid will not be able to use it because drug companies, which helped negotiate the rates, could be seen as violating anti-kickback laws. And the payments also may not count toward a consumer’s deductible, which could end up raising costs for them in the long run.

The move could also be a way for Express Scripts to find new business. The company recently announced that its biggest customer, the insurance giant Anthem, would not renew its contract in 2020, news that sent Express Scripts stock down significantly and has raised questions about whether the company needs to change its business model. Express Scripts is the nation’s largest pharmacy benefit manager — its main business is negotiating with drug companies on behalf of insurers and large employers — but other top players are part of larger companies with other businesses. CVS Health, for example, also has a large pharmacy chain, and OptumRx, the third-largest player, is part of the health insurer UnitedHealth.

The news that Express Scripts was offering a program to help offset the high prices of prescription drugs struck some as odd, given that the company has been criticized for contributing to those high costs in the first place. Express Scripts and other benefit managers design plans that help insurers and employers reduce costs, and in recent years those companies have opted to shift much of that burden to consumers. Critics of pharmacy benefit managers have also noted that Express Scripts and others keep a slice of the rebates that are negotiated with drug companies and are based on a percentage of the list price — meaning that they make more money when drug prices go up.

Mr. Wentworth disputed the idea that Express Scripts contributes to rising drug costs and said the InsideRx plan is evidence that it is acting in consumers’ interests. “From our standpoint, we see the challenges, and that’s why we are trying to do something about it,” he said.